August 2019: Knowledge Economy M&A and Equity Market Update

  • Major deals profiled include Guidehouse’s acquisition of Navigant Consulting, BC Partners’ purchase of Presidio and Accenture’s acquisition of Parker Fitzgerald.
  • The Equiteq Knowledge Economy Share Price Index declined over the month in line with broader equity markets.

Veritas Capital-backed Guidehouse acquires Navigant Consulting in a landmark management consulting transaction.

Target: Navigant Consulting is a US-headquartered global professional services firm that was listed on the NYSE.

Buyer: Guidehouse is a US-headquartered provider of management consulting services to government clients. Guidehouse formed following Veritas Capital’s acquisition of PwC’s public sector advisory business last year.

Deal value: $1.1bn (1.4x TTM Jun-2019 revenue)

Deal insight: 

The acquisition of Navigant will create a major management consulting player with deep industry expertise. Guidehouse has worked on high-profile lucrative engagements with government agencies such as the department of defense, homeland security and veterans affairs. These government-focused advisory capabilities will be merged with Navigant’s strengths in consulting to the healthcare, energy and financial services sectors.

The sale of PwC’s government consulting business to Veritas Capital was followed by a rebranding of the business to “Guidehouse” last Summer. The divestiture is expected to allow PwC to focus on the growth of other parts of its advisory business and to enable it to pursue more business in auditing government agencies. This audit business was being limited due to professional standards which cap consulting services that audit firms can provide to these agencies.

Private equity firm BC Partners acquires digital services provider Presidio.

Target: Presidio is a US-headquartered IT solutions provider focused on digital infrastructure, cloud and security solutions.

Buyer: BC Partners is a UK-headquartered international investment firm.

Deal value: $2.1bn (0.7x TTM June 2019 revenue)

Deal insight: 

Presidio has experienced strong revenue and profit growth since completing its IPO in 2017. BC Partners noted Presidio’s secular growth which is driven by IT systems and networks becoming increasingly complex. The investment firm also highlighted the opportunity for further expansion of Presidio in the fragmented digital industry.

The deal exemplifies the strong demand for notable knowledge-intensive services assets from prolific private equity investors that are supported by substantial sums of dry powder. BC Partners investment in Presidio follows Bain Capital’s acquisition of digital consulting firm Brillio in January. Many private equity investors are observing strong growth potential in the industry and opportunities to leverage the recurring revenue of technology services companies, which is creating a new avenue for returns within the space.

Accenture acquires financial services consulting firm Parker Fitzgerald.

Target: Parker Fitzgerald is a UK-headquartered strategic advisor and consulting partner to global financial institutions.

Buyer: Accenture is an Ireland-headquartered global professional services company.

Deal insight: 

The acquisition will strengthen Accenture’s risk consulting business catering to financial services clients globally. Demand for consulting services to the financial services vertical has grown with new regulatory pressures on the industry after the last financial crisis. This has been compounded by the rapid digital transformation of major financial institutions in response to new competition from fintech and challenger banks. The acquisition of Parker Fitzgerald follows Accenture’s purchase of financial services focused management and technology consulting firm Orbium earlier in the year. Accenture continues to be one of the most active buyers in the knowledge economy. The business has noted that it expects to spend $1.5bn overall on acquisitions in fiscal year 2019.

Selected Knowledge Economy M&A announced in August:

Source: PitchBook, S&P Capital IQ and company press releases


Knowledge Economy Share Price Index

Source: S&P Capital IQ


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